Recently, everyone is waiting for interest rate cuts, but many people still don't know why interest rate cuts are good for the market.
1: Increased liquidity. Interest rate cuts mean lower borrowing costs, which usually increase liquidity in the market. Thereby promoting consumption and investment
2: Interest rate cuts usually reduce the yields of fixed-income investments (such as bonds), so many investors will turn their funds to other markets with higher yields
3: Interest rate cuts may trigger inflation expectations because more funds flow into the market and demand for goods and services increases. If the market expects inflation to rise, investors may buy assets to hedge against inflation, which may also drive the market up.